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F e d e r a l Re s e r v e Ba n k OF DALLAS Dallas, Texas, June 2, 1948 INCREASE IN RESERVE REQUIREMENTS OF MEMBER BANKS IN CENTRAL RESERVE CITIES To the Member Banks of the Eleventh Federal Reserve District: There is enclosed a Supplement to Regulation D adopted by the Board of Governors of the Federal Reserve System, which covers an increase in the reserve requirements of member banks in central reserve cities to 24 per cent of net demand deposits from the existing rate of 22 per cent, effective at the opening of business on June 11, 1948. The Board of Governors has released the following press statement regarding its action: “As a further step towards restraining inflationary expansion of bank credit, the Board of Governors today increased from 22 to 24 per cent of net demand deposits the amount of reserves required to be maintained with Federal Reserve banks by cen tral reserve city banks. This action is to become effective Friday, June 11, 1948. “The effect of this increase, like the one which became effective on February 27, 1948, will raise the required reserves of central reserve city banks in New York City by approximately 400 million dollars and those in Chicago by nearly 100 million dollars. “Under the provisions of Section 19 of the Federal Reserve Act, the Board of Governors has authority to establish reserve requirements for the various classes of member banks within the following limits : ffmum Against Net Demand Deposits Central Reserve City Banks Reserve City Banks . . Country Banks . . . Against Time Deposits All Classes of Banks . Maximum 13% 10% 7% 3% . 26% 20% 14% 6% “Reserve requirements are now at the maximum limits in all cases except for net demand deposits at central reserve city banks which, after the present increase becomes effective, will be 2 percentage points less than the maximum under existing authority.” While the change mentioned does not affect member banks in this district, they are being advised in regard thereto as a matter of information. The enclosed supplement should be inserted in the ring binder containing current bulletins of this bank and the regulations of the Board of Governors of the Federal Reserve System. Please acknowledge receipt of this supplement on the enclosed post card. Yours very truly, R. R. GILBERT President This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM SUPPLEMENT TO REGULATION D Effective as to each member bank at the opening of business on June 11, 1948 Reserves required to be maintained by member banks with Federal Reserve banks Pursuant to the provisions of section 19 of the Federal Reserve Act and section 2(a) of its Regulation D, the Board of Governors of the Federal Reserve System hereby prescribes the following reserve balances which each member bank of the Federal Reserve System is required to maintain on deposit with the Federal Reserve bank of its district: 6 per cent of its time deposits plus— 14 per cent of its net demand deposits if not in a reserve or central reserve city; 20 per cent of its net demand deposits if in a reserve city, except as to any bank located in an outlying district of a reserve city or in territory added to such city by the extension of the city’s corporate limits, which, by the affirmative vote of five members of the Board of Governors of the Federal Reserve System, is permitted to maintain 14 per cent reserves against its net demand deposits; 24 per cent of its net demand deposits if located in a central reserve city, except as to any bank located in an outlying district of a central reserve city or in territory added to such city by the extension of the city’s corporate limits, which, by the affirmative vote of five members of the Board of Governors of the Federal Reserve System, is permitted to maintain 14 per cent or 20 per cent reserves against its net demand deposits. The supplements to Regulation D which have previously been issued are hereby revoked and superseded.